Pod Insights Equity Podcast Elon Musk can't hear you over the sound of his $1.75 trillion IPO About this episode The SpaceX S-1 is finally here, and the story it tells goes way further than rockets. The filing runs to 36 pages of risk factors alone, and the numbers inside match the ambition: a $28 trillion total addressable market, a pay package tied to establishing a Mars colony, and a valuation target that would make it the largest IPO in American history.
On this episode of TechCrunch's Equity podcast, Kirsten Korosec, Anthony Ha, and Sean O'Kane dig into what the filing actually says, what it leaves out, and whether any of this math connects to reality.
Listen to the full episode to hear about:
Why NanoCo turned down a $20 million buyout to raise a $12 million seed instead
Anthropic’s acquisition of SDK startup Stainless, and why taking a tool off the table matters as much as the $300 million price tag
What happened when commencement speakers started talking up AI in front of graduating classes, and why the students weren't having it
Google’s I/O announcements claiming search as you know it is over, and what the AI makeover could mean for the open web
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Transcript 0:00 Speaker 00 This episode of Equity is brought to you by Schneider Electric. Schneider Electric, your energy technology partner.
0:05 Speaker 01 Hello and welcome back to Equity TechCrunch's flagship podcast about the business of startups. Today is Friday, May 22. I'm Kirsten Korosec, tech editor over at TechCrunch, and I'm joined, as always, by our Weekend Editor, Anthony Ha, and Senior Reporter, Sean O'Kane. This week, what was really remarkable is that the OpenAI Elon Musk trial was not the biggest news of the of the week somehow. Didn't think that was going to happen.
0:34 Speaker 00 Right, but we should still talk about the news, at least a little bit. The fact that Elon Musk did lose the trial, although he sort of seems to be trying to declare a moral victory, partly because he lost on what is arguably, you could call it a technicality, which is just the statute of limitations, that the jury said his, whatever damage he may or may not have suffered, it happened kind of too long ago and he waited too long to file the lawsuit.
0:58 Speaker 02 You know, you can do a lot with two hours. You can go see a movie, you can maybe go on an extended run, you can get a good nap in, or you can apparently have your entire jury deliberations and turn around and come back and say, actually, yeah, this is, we're throwing this out, goodbye. You can tell Elon Musk no in two hours, which I find pretty remarkable these days, as we'll get to it later in the show. It gets harder and harder to say no to this guy.
1:23 Speaker 01 It is getting harder and harder. Obviously, his lawyers did not say no to him because they much must have known the statute of limitations, they must have known that this was going to be bumping up against, and they said yes anyway, and went ahead and spent a few weeks in the trial.
1:38 Speaker 00 And they may be spending more time because, you know, they've they've said that they're going to appeal. And so, you know, we'll see where that goes. I think the other question is sort of, regardless of what happens moving forward, is like, is it fair to call OpenAI the victor? I mean, certainly in the in the legal sense, that is true, and things could have, you know, I guess, potentially gone a lot worse. But there's also this sense that OpenAI's reputation has been damaged pretty significantly by kind of what's come out. So even if they won the legal case, you know, they're also, maybe it's a case where everyone's kind of the loser.
2:10 Speaker 02 We should say Musk has said he's going to appeal. As is usual for Elon Musk, he has sort of backed himself into a sort of like ideological knot of, at the same time, calling this like a sort of procedural decision that doesn't really matter on the merits. And then also claiming that this is setting a dangerous precedent that allows other people to go loot charities without, you know, recompense. And it's like, you really can't have it both ways, man. Just pick a lane. So we'll see where it goes. I think, you know, as far as OpenAI goes, I think it was a pretty obvious sign of their confidence of where this goes for the rest of time. That, you know, two days after this trial was ended, we got reporting that they are about to file confidentially for their own IPO
2:53 Speaker 02 within a matter of days or weeks. So, you know, I think they are, they are ready to put this behind them.
2:58 Speaker 01 Well, if we have learned anything and what we're going to talk about later is that Elon can have both. On the show today, we're going to have deals of the week from the company behind OpenClaw, alternative NanoClaw. And then we're going to talk about an anthropic acquisition that's pretty interesting. We're going to then get into AI and the tension between consumers and the tech companies that really are embracing AI and pushing it on these consumers. And then, of course, we're going to get into the SpaceX IPO.
3:33 Speaker 01 I'm not a big NanoClaw, OpenClaw follower, but the headline here is more than just that they raised 12 million in seed funding.
3:44 Speaker 00 So the company is called NanoCo and the product is NanoClaw, which is sort of this secure alternative, or at least it builds itself as the secure alternative to OpenClaw. And in addition to raising the 12 million seed, they sort of said that that was kind of an alternative to, they were doing that instead of taking this $20 million buyout offer. So it seems like, again, like very quickly, there's, there's been a tremendous amount of interest.
4:09 Speaker 01 Yeah, and it's kind of cool because these are brothers. And so it's kind of like a fun, you know, family startup story. But the pace of which they were playing around and build this product to getting the seed round was something like, I don't know, it was less than two months.
4:25 Speaker 02 You know, I'm certainly curious who was willing to put up $20 million for them and and who it was that they rebuffed. We've seen other, I mean, the OpenClaw guy got a sort of acquired or acquihired or whatever you want to call it by OpenAI. Like, we've seen a bunch of these folks who come up in this space, get snatched up by some of the leading labs. And in those cases, we tend to see those people get paid a lot of money. You know, you are getting sort of more money than the dollar you put in. And 20 million to me here, yes, this is a more targeted thing. This is not like breaking the world in a way that that OpenClaw itself was.
5:06 Speaker 02 But, you know, I I wonder if that $20 million is coming from, we know that there was some interest from from the Hugging Face CEO who invested in this company and in this round. I'm just curious, because this, that 20 million feels like a figure that's like in the middle. And if this was coming from like a, you know, a meta or OpenAI, I think we would have seen. I think it would have been a lot harder for these guys to say no.
5:27 Speaker 01 They've only existed for two months. So give them a break, Sean, you know, 20 million is still a lot of money.
5:32 Speaker 02 I'd take it.
5:33 Speaker 00 I'm with Sean here that I think that 20 million for like an AI start, a hot AI startup, however new it is, feels like the low end right now.
5:41 Speaker 01 Okay, fair, but we should say they were led by Valley Capital Partners. And you're right that the Hugging Face CEO was an angel investor. And that one was interesting because I guess he just reached out to the founders via like social media somehow and was like, hey, I'm really interested in your product. And it became like within a couple of exchanges and a conversation, and it turned into this investment. So, you know, to me, 20 million, sure, low compared to some of the others, but maybe that is the cap or the bar that these founders set. I mean, there is something to be said about taking too much money and diluting your equity if you don't need to.
6:24 Speaker 00 I also wanted to just talk a little bit more about the product, which I haven't tried myself. But one of the things that was like really striking when kind of open claw fever hit everyone, right? It was like, oh, this like is this really powerful, you know, agentic AI. But then you started to see these examples of, oh, like, but you gotta be careful. It might delete a bunch of crucial files or do something else that's like really harmful and irreversible. And so basically what Nano Claw does is it basically operates in a sort of container. So it doesn't get access to a lot of that other stuff on your computer. And that, I guess, makes sense. But at the risk of being glib, that also just feels like a real sign of a product that's not quite there.
7:08 Speaker 00 That like, I don't know, I just feel like a piece of software, you should be able to run it normally on your computer and not have it risk destroying everything.
7:17 Speaker 01 You literally just described like everything that is happening right now in the AI industry, which is, it's a little precarious out there.
7:26 Speaker 02 In some respects, I am happy to see some folks who are expressing caution in a number of ways here. Caution because they want to take some time to build up the business the right way. You know, you look at the website for NanoCo. You know, I know this is not targeted at a general consumer audience, but it is a very clearly not targeted at consumers kind of thing in the way that they describe what they're offering. And so I think they need to work through who exactly they want to go sell this stuff to and how exactly they want to build it, figure out what their product really should be. And also that they showed some caution around the more, what would, what should I call it? The wildest tendencies of open claw to do kind of really remarkable things
8:10 Speaker 02 that you don't realize that it's doing. You know, I guess it's, it's nice to see, especially as we are coming off a trial where. Two big companies or two big players in this space have spent the last couple of years yelling about, you know, inventing digital god, you know, sort of facing off against each other. We had, we have these people who are sort of like, you know, actually, we wanna, we wanna dial it back a little, you know, and we, we know we wanna aim at something a little smaller.
8:35 Speaker 01 You mentioned earlier that it's not really clear totally who their customers are, but we kind of know some of their fans and we could, you know, read into that a little bit. And one of the people who was most vocal about it was Andre Karpathy, who was an OpenAI co-founder. Big alarm bells went off this week. He went over to Anthropic, which we're about to talk about. But he was, he was actually a big supporter of, of this startup and I think helped bring a lot of attention and probably some investment.
9:07 Speaker 02 Yeah, I liked, you know, Julie Bort, who wrote this story, and she also wrote a story about NanoCo when it first really blew up earlier this year, had this really funny sort of anecdote that these guys told her about involving when they found out that Andre Karpathy had started tweeting about NanoClaw and how much he loved it. And, you know, they're sort of like, you know, they're painting this kind of scene of like waking each other up and like, we gotta respond to this. We gotta take this momentum and run with it. They basically sat on the couch all weekend and it, it just makes, you know, gives me this like really vivid idea of, you know, how much we've moved from these sort of like garage-based Silicon Valley startup to a like legitimate couch startup scene where, where there's just so many people starting up companies without even, you know, sort of getting up off the sofa.
9:52 Speaker 00 Well, Kirsten, you've mentioned that we're gonna be talking some more about Anthropic. And in fact, that's kind of our next deal is this acquisition they did of a startup called Stainless.
10:02 Speaker 01 But I have to say, by the way, I love the garage, the couch analogy and we should definitely write a story about that. I don't know if Stainless was built in a garage or on a couch, but they did create something that Literally every AI lab wants SDKs, which are like a software development kit, is nothing new. But what they did was they created a way to automate that for APIs. And that is important for AI labs that are creating AI agents. So instead of having to manually go in and like change a lot of various parts of it without getting too deep in the weeds. This tool was able to automate and sort of maintain things.
10:45 Speaker 01 And that's really important when you're launching a bunch of agents, like, you know, dozens, hundreds. You know, if you were to believe Jensen Huang, the Nvidia's co-founder and CEO, on his earnings call the other day, billions of agents. Okay, so it'd be nice to have them automated.
11:02 Speaker 02 Yeah, this feels like another one of, you know, the latest in the line of these kind of like, take a piece off the chessboard moves that we've seen where, you know, typically we've seen that in sort of aqua hiring of, you know, hollowing out scale AI or buying basically the OpenClaw guy. This one was a bit more traditional in what you described as sort of like buying a product that's filling a need and doing it quickly before it spreads too far to other people and becomes like a sort of a monopoly problem where you're owning a little bit too much of the stack. So I mean, it seems like a smart move from Anthropic in that regard. We should say it paid reportedly around $300 million for it. So this is, this is one where, you know, we were seeing a more mature idea
11:47 Speaker 02 get a lot more of Anthropic's money thrown at it, which is, you know, it's not the only one that we've learned about Anthropic throwing money at this week.
11:55 Speaker 00 It sounds like it's sort of aqua hire-ish, but not like, I think often when I think of an aqua hire, really it's that like the product really is just sort of going to go entirely. And it's just about like hiring the team. And it sounds like Anthropic does have some intention, or at least is acting as if it has some intention to use the technology for itself. It says that, you know, this is, it's used this for its own SDKs kind of for a while now. So it's not like they're throwing the tech out entirely. They're just not making it available to any of their competitors.
12:25 Speaker 01 Yeah, I mean, they noted that they have been using this since the beginning. So I think that's pretty remarkable. They obviously see value in it. They just don't want anyone else to have it. It feels very much like, you know, this is my ball and taking it home with me. You can't play. Um, you know, Sean kind of alluded to this a little bit that, you know, Anthropic's been throwing money around in a few places. And I, I think the, the dollar signs that I really want to know is what it costs to get Andre Karpathy on board because they just brought him on. They've hired him. That's a big deal for a number of reasons. Um, OpenAI, he was an OpenAI co-founder. He had then gone to Tesla, then he went back to OpenAI, then he left and was starting this
13:10 Speaker 01 company that I really didn't see much activity from. It was Eureka Labs, but he is an incredibly high-profile person in the world of AI and now Anthropic has him. And they're, you know, I would love to know what it, what it took.
13:25 Speaker 02 I mean.
13:25 Speaker 00 I'm guessing it's a big number.
13:27 Speaker 02 Yeah.
13:28 Speaker 00 I'm guessing it's more than any of us make. How about that? And that's.
13:31 Speaker 02 Yeah.
13:32 Speaker 01 Oh, that's a good guess, you know? Yeah, that's safe, I think.
13:35 Speaker 00 I think the other thing, I mean, that this is something we talk about a lot, but just solidifies that sense of, you know, a couple of years ago, when you said AI, OpenAI really was sort of unquestionably the first company that came to mind, and it still is, but that, that there's a sense of that, sort of they don't quite have the heat that the way they did before and, and Anthropic is sort of, you know, breathing down their neck or, or ahead of them in, in some categories.
13:58 Speaker 02 We're also seeing, I think, you know, what could be an important inflection point for these companies in the way that they compete against each other in the sense that it got reported this week that, uh, you know, Anthropic is maybe headed for its fourth, first sort of like good quarter where it's not just like deeply in the red and is actually building what looks like a sustainable business, which is not only important for them, but is important in how it distinguishes itself and its business from these other players. Anthropic is not really going out there and saying, we're going to partner up on all these data centers or not, we're going to put shovels in the ground and do all this incredible hard CapEx that like OpenAI is trying to do with Stargate, that Tesla and XAI are doing with their own sort of compute.
14:42 Speaker 02 You know, Anthropic has really kind of stayed pretty narrow in that regard. I mean, they still don't, they don't even have an image generator, right? Like, they're as focused as these companies seem to come, which still is arguably not focused sometimes, but it seems to be paying off for them. And, you know, I would imagine that that probably played into Andre's interest in joining them versus, I mean, listen, you go to OpenAI right now, I know that they have stopped their side quests, but they haven't stopped their side quests, right? Like, you don't know what that company's gonna do any given week, and you probably have a better idea what Anthropic will.
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15:46 Speaker 01 You mentioned an inflection point, and I want to note that there is another inflection point that seems to be happening, and I'm wondering if, I know Anthony noticed it because he wrote a little bit about it, which is, there seems to be this moment right now that's happening, especially with younger generations, where they are actively pushing back in somewhat public ways against all of these tech companies, OpenAI, Anthropic, but also some of the more legacy ones like Google, pushing AI products on us as consumers.
16:22 Speaker 00 Right, and this was, I mean, I think, a pretty visceral thing, not like a carefully detailed, like, position paper or anything, but just that at a number of commencement speeches, and I wrote about two, but I think there was actually a third as well that I hadn't seen until my piece published, where the commencement speaker, in one case Eric Schmidt, the former CEO of Google, started talking about AI and about the future of AI. And I mean, it wasn't like just pure boosterism, but it was like, it was pretty like, yeah, this is pretty great. And the students did not agree because they would, they just started booing and kind of like, it's pretty remarkable to watch these videos because it like picks up momentum and then it sustains.
17:02 Speaker 00 And like, in some cases, you can see the speakers are like genuinely really surprised at how negative the response is.
17:10 Speaker 01 Probably one of the stories that got the biggest reaction this week was from our editor Sarah Perez, who wrote about Google Search, as you know, it is over. Google had their I/O developer conference. They announced a lot of stuff. We have a ton that we will probably show, um, link to in the show notes. But this story in particular resonated with a lot of people because they are changing Google Search and they are putting AI front and center. So those 10 blue links that we used to always see are disappearing. And I'm very curious to see if Google sticks with it, if they get a lot of pushback. I think that they will, just because they have to make this whole AI play work. But I don't know. What do you two think?
17:54 Speaker 02 Well, I mean, there's, they've been on a slow march to this for a while now, right? Like, so part of me thinks there's been so much momentum built up behind this that I don't think they care how much blowback they get. Maybe they'll tweak things here and there, but like, they clearly seem to see some value in doing this. You know, at an extremely high level, they do not seem to be willing to reckon with the sort of like basic mechanics of if they let the open web die, they lose the sort of fresh creation of new information that their AI is supposed to serve up to people.
18:33 Speaker 02 And maybe the assumption there is just that their AI will get smart enough to figure that out and like make it new somehow. I don't really understand that, but I don't, I don't see them really turning this around. I will say they, you know, they have sort of said like that blue links are not going away. They're further down the page, but like, you know, it is clear that they want you. This has been the end goal for a while. Keep you at the top of the page when you open up Google Search. You know, whoever, we haven't clicked past the first or second page in years anyways. And all of that has been stuffed with sponsored stuff. And so now, you know, it's all about sort of audience capture.
19:14 Speaker 00 I feel. Very pessimistic about this. It feels like, and I'm sure that they have seen engagement. And I noticed myself that as much as I did not like the idea of AI overviews, like that I would get lazy and that would be the first thing I'd read when I did a search. And I'm sure they're seeing that engagement kind of happening across the board. I mean, eventually I got sick enough of it that I just started using a different search engine. But like what Sean was saying is it just also just seems so short sighted in the sense that like I don't like this idea that, oh, we can just put all this information at your fingertips. Well, like, where's this information going to come from if you've kind of just destroyed the business model of every other publisher on the web? And also, like, why would those publishers then work with you? Because right now, you know, again, I think there's like a lot of legal stuff around
19:58 Speaker 00 fair use and things, but like fundamentally, it's like, OK, you can crawl our webpage because you're going to give us traffic. Well, if you're just going to extract all the value from that and give us nothing, why would any publisher want to be indexed by Google anymore?
20:10 Speaker 01 Yeah, I mean, that's a good point. Also, the fact that this isn't just limited to Alphabet, the parent company's Google search product. This is going to YouTube as well. We're seeing a lot of like AI powered conversational search to video. Our AI editor, Russell Brandam, did a really interesting story, kind of summing up how this is sort of spilling out everywhere, like so many companies, smaller startups, much, much smaller than than Google has been in a decade or more, all going after AI search and getting money for it. So I kind of wonder if these companies are probably ripe for acquisition targets. But these are companies like Exa Labs and Parallel that are raising money all to bring
20:54 Speaker 01 AI search to consumers.
20:56 Speaker 02 To that point, like, one thing that I'm not saying I'm optimistic about, but I am really interested to see develop is for the last, I mean, what, 20, 25 years, trying to create a competing browser. Because like, let's be real, that's really what we're talking about when we're talking about Google search. You know, trying to create a browser and/or a search competitor to Google was just a nonstarter. We saw a bunch of people try, but you just never could create that data flywheel that Google has spent decades building on to make the results good. And the financials were just not there. If you were doing the browser component, like trying to get people to actually pay for a browser is really, really tough.
21:41 Speaker 02 And so there has never really been competition to Google Search or really to Chrome in a lot of ways. But all of these advancements that we've seen in AI are partially driven by the technology that Google has developed, has made it possible, it seems, for competition to actually try to make a stake, you know, in this market. And, you know, I'm hopeful that there is some version of that that, you know, is willing to compete with Google on like what we think Google to be as far as like a resource versus a product. My only hesitation is that they're going to compete on like what Google's trying to do with Google Search right now, which is like become a singular funnel where all your questions go and, you know, where the answers come from is really not your concern.
22:26 Speaker 00 Yeah, I hope there is more competition and that it does feel like, in a way that was unthinkable a few years ago, you could imagine Google at least being less dominant. And I would love it if a competitor, instead of being like, I'm just going to build another chatbot, was like, you know what's great? The internet. Let's build a search engine that lets people access the internet. And I think that's a great business idea that someone should build.
22:47 Speaker 01 We're out of time to talk about that, but we have one other little story that we want to touch on, and that's a SpaceX IPO. Ask me anything.
22:55 Speaker 00 This is going to go super quick, right?
22:57 Speaker 02 Yeah.
22:58 Speaker 01 Exactly.
22:59 Speaker 02 Yeah, real short, real short segment.
23:01 Speaker 00 So this is something that I think longtime listeners know that you guys have been real excited about, really eager for. What were the things that just jumped out at you the most?
23:13 Speaker 01 Sean, please, kick it off.
23:16 Speaker 02 Uh, I will, very quick scene setting. I will say, like, for a long time, relative to like how short our memories can be, it was not that long ago that this was not on the table, right? Like Elon Musk hates public companies. He hates being a public company with Tesla. He hates having to do the earnings calls or whatever, but all of a sudden, we saw a shift six, seven, eight months ago to, uh, I'm gonna do orbital data centers and SpaceX is gonna go public and we're gonna merge all my other companies together. So I just want to put that context out there, uh, because I do think it informs some of the wild stuff that we see in here that as lawyered up as the document is, and this S1 filing that dropped this week, it still is full of a whole bunch of really wild ideas. To me, the craziest thing that is in this document is that SpaceX says it has
23:58 Speaker 02 a total addressable market of $28 trillion, which is like, you know, ballpark US GDP. And, and that's not the crazy thing to me. The crazy thing to me is it says 22 trillion of that is gonna come from quote unquote enterprise applications. And for a moment, when I was reading through this document yesterday, I was like, okay, like, I guess they mean like enterprise AI. Clearly, we've seen attachment in enterprise AI from these, from Anthropic and OpenAI. Like, I guess they mean that, but they must also mean like the orbital compute stuff that they've been talking about and like Starlink for business. No, those things are separate.
24:38 Speaker 02 They are talking about a, you know, they are telling investors that they're going to the public for money from that they will be able to, you know, eventually get to a market that is $22 trillion just on sort of enterprise AI. They go deeper into much weirder ideas in the filing about sort of like quote unquote, human augmentation, you know, using AI to make it so much more, you know, everything possible for humans to accomplish. So that was the thing that really jumped out at me more than anything else. Like, yes, of course, the Mars goals, you know, Elon Musk getting a pay package that's associated with establishing a colony on Mars. But that this one, it's such a concrete thing to pitch to people that also just feels so ridiculous to me.
25:23 Speaker 01 Yeah, concrete, I don't think, a concrete thing to pitch without any actual real details on how it plans to get there. Um, is sort of the crux. What really stood out to me was
25:37 Speaker 01 We, I think a lot of people traditionally think of SpaceX as a rocket launch company and they're, they've always been kind of more than that. I mean, there's Starlink, which is the one big moneymaker. But everything kind of came to that beginning point of democratizing space travel and the reusable rocket. And so a lot of people think of it as a rocket company. But when you look at their capital expenditures, um, hmm, they're not putting all their money towards space, which to me was not what I expected, especially because so much hinges on Starship, which is actually supposed to be, as we're recording this, is
26:18 Speaker 01 I think supposed to be launching, um, weather dependent. Um, so here's the line and I, and I'm reading it just so I don't forget. So 3.8 billion for space on CapEx, a lot of money, um, 4.1 billion for connectivity. So that's Starlink. Okay, that makes sense because the company is making money off of that. It's actually a growing enterprise. But then 12.7 billion for AI, which by the way, is also the segment, this is the XAI merger that happened earlier, um, is burning through enormous amounts of cash. So I don't know, that to me was what really struck me.
26:59 Speaker 02 Certainly burning through enormous amounts of cash, but one of the things we learned in this filing is that Anthropic is part of this deal that got announced ahead of the IPO, is paying them already around 1.2 billion dollars per month, uh, over the next few years to access the compute that they have in, you know, at the sort of Colossus One facility in Memphis. So like, they are finding ways to patch those holes to a certain degree. I mean, they also have like 30 billion dollars in debt. So like, it ain't over yet. But like, I, I think it's interesting that they are doing that and trying to shore up the business in some ways. And yet, like, that's still, even in the most idealistic version of that
27:40 Speaker 02 down the road, selling compute isn't even like what they think their biggest addressable market might be.
27:46 Speaker 00 Yeah, what also jumped out to me about the AI business, I guess, thinking about it in the context of SpaceX's larger business is the fact that, if I remember correctly, they were basically profitable in 2024, but then lost billions of dollars in 2025. And I think a lot of that, I imagine, has to go, has to be to do with just higher and higher expenditures. And I guess then that, zooming out from that also, just thinking about the business and valuation of SpaceX as a whole, they're, I guess, looking right now to raise at a $1.75 trillion valuation, which, you know, with these kinds of filings, that number could change. But Kirsten, I think you have some thoughts on whether or not that is a good valuation.
28:27 Speaker 01 I think it's overvalued. And I'm sure there are a lot of people out there who are getting upset. I think space is cool. I'm a huge space person. I'm very much into that. I think it's great. I love the fact that there is amazing tech coming out of these companies here in the US. That being said, I think it's overvalued in the point that Sean kicked the whole discussion off about. There's, there's some stuff in here that is just very hard to nail down, and that TAM is just so incredibly high and not tied to anything that is real. I think that they have a growing Starlink business, but that even is showing how their cost of revenue, when you really dig into the numbers, their
29:11 Speaker 01 revenue is going up, but their cost of revenue is also going up. And so there are some headwinds there that I think are important to note. Also, space launch, they did add some new launches, but that is not a fast-growing business right now. And their costs, their costs are going up. So, an optimist, and someone who's all in on Elon Musk, might say, well, this is, he's building the next great company, and this is the future, and it's innovation, and, and all caps. But there is a limit to that, I think. And my limit is that valuation. It is below it.
29:50 Speaker 02 And here's the thing, if you disagree, I mean, don't just don't go near this stock, right? Like, this is not financial advice, but like, the other thing that I really focused in on in this filing is that like, for all the control that Musk has at Tesla, he, it is, it is that and then some here at SpaceX. I mean, he is gonna walk away from this IPO with more than 50% of the voting control. He's gonna be able to name, you know, whoever he wants to the board of directors. It's already full with a bunch of people who are really close to him. It's just like, as controlled a company as you're gonna find on a publicly traded market. And then you add in all the other stuff that has changed, sort of as a result of his decisions over the last few years in just corporate law,
30:32 Speaker 02 like, moving to Texas, moving away from Delaware. You aren't gonna be able to bring a derivative suit against SpaceX if you're a shareholder, unless you own 3% of the company, which like, at a $1.75 trillion valuation is like a $52 billion position. So like, there's just, he is so insulated at this company that like, if you really disagree with where the market is pricing this company when it starts trading next month, there are no levers for you to really like, act on that disagreement. Other than like, trying to short sell it, which like, you know, good luck. Because like, in a couple of weeks after it goes public, it's gonna be added to the indexes and the price is just gonna go up even further at that point, once institutional investors pour in, and it's all in our 401ks, so.
31:17 Speaker 01 I, I wanna note one disclosure really quickly. We don't hold stock in any of the companies we write about. Anyway, go ahead.
31:24 Speaker 00 I think this also speaks to like, sort of the paradox often of talking about both Tesla and SpaceX and Musk in general is that often there are these really impressive accomplishments. And in the case of SpaceX, certainly there's like, a, like a real business there where it's bringing in like, tens of billions of dollars in revenue. And, you know, and heading into a large extent has created these new markets. And also like, to get to the valuation that they're talking about requires so much, essentially fantasy math, speculation, you know, whatever you wanna call it, where it's just like, like the numbers, the, the real numbers on the page don't matter at this point. It's just kinda like, well, do you believe that like, we're going to like, you know, be a multi-planetary civilization?
32:09 Speaker 00 And SpaceX is going to control a lot of that business? Cause if not, like, maybe this isn't a great bet.
32:15 Speaker 01 It's all about faith.
32:17 Speaker 02 Yeah, speaking of faith, I want to note two real quick things. One, to your point about the numbers. If you look at other major companies that have gone public and like the largest listings ever, you will note that these numbers that they're targeting are just like sort of a tick above a Ramco. Like there, I don't think there is any coincidence in the fact that they are trying to make sure from the jump that this is the biggest IPO ever. But to the bigger vision stuff, there is not one mention in here of, you know, the sort of biological viability of a multi-planetary civilization, which to me, as a prospective investor, would seem like a pretty big risk factor that should have been included in this prospectus of like, is that part even possible? Sure, the engineering may be possible, the technological side of this may be possible.
33:01 Speaker 02 Musk has shown in allergy his entire career to considering the biological limits of human spaceflight, which, you know, repeated flights to the ISS have shown are real and go well beyond radiation, you know, risks.
33:14 Speaker 01 You're such a cynic, Sean. Why don't you believe in the future? We are going to be able to talk about this so much more. We've got the IPO debut coming up and so stay tuned for our next episodes. Equity will be back next week. Until then, you can find Equity under the handle at EquityPod on X and Threads.
33:41 Speaker 03 Equity is hosted by TechCrunch senior reporters and produced by Teresa Locan Solo with editing by Cal. Subscribe on YouTube or wherever you get your podcasts and find out what's next at techcrunch.com/events. Thanks so much for listening and we'll talk to you next time.
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